The topic of balance billing is in the news again, closely associated with the newer term, “surprise billing.” Patient experiences such as those of Drew Calver, who received an unexpected $109K bill following treatment for his heart attack, have focused new attention on this long-standing issue.

Balance billing is the practice of pursuing from the patient any balance remaining on account after the insurance payer has reimbursed its portion to the provider, beyond the expected co-pay, co-insurance, and deductible. The terms of the contract between the provider and insurance plan will generally dictate what is or is not billable to the patient – the aforementioned co-pay, co-insurance, deductibles, for example – and these contract provisions (and state law, typically) will control whether or not a patient may have further financial responsibility.

When there is no contract, of course, all bets are off, since an out-of-network provider has no negotiated payment rate. As high-deductible health plans have become more widespread, many patients are keenly aware of the benefits of staying in-network to keep those expected costs as affordable as possible. But what about when services must be rendered by an out-of-network provider?

In a number of cases highlighted by the media recently, a patient was not aware that out-of-network providers were engaged in the treatment. This commonly happens when an emergency department physician working through a staffing agency, or an anesthesiologist or radiologist is involved in care but is not in-network. Hence, the surprise of “surprise billing” – the receipt of an out-of-network bill when the patient thought they were at an in-network facility.

New Jersey’s Assembly Bill No. 2039 has likewise garnered quite a bit of attention since its enactment and particularly since its effective date August 30, 2018. Governor Phil Murphy, who signed the legislation earlier this year, said “We're closing the loophole and reining in excessive out-of-network costs to prevent residents from receiving that 'big surprise' in their mailbox. At the same time, we're making healthcare more affordable by ensuring these costs are not transferred to consumers through increased health premiums."

New Jersey is among 21 states that have partial or comprehensive protections against balance billing by out-of-network providers in emergency departments or in-network hospitals. Stipulations of the protections vary by state. Variables include applicability by setting, type of managed care plan, the type of protection, and the payment outcome, whether a payment standard or a dispute resolution process. And since ERISA currently exempts self-funded employer sponsored plans from state regulation, 61% of privately insured individuals are not covered by their state’s protections, adding to the complexity.

There is speculation that changes could be made to ERISA (the Employee Retirement Income Security Act of 1974) to overcome this loophole to state protections. Senator Bill Cassidy, M.D. (R-LA) announced on September 17 a discussion draft of a bill that would modify ERISA to defer to state limits for patient costs for emergency care; or, in absence of state limits, define restrictions within the proposed legislation itself to cap patient responsibility. This is one issue among several concerning healthcare price transparency that is being discussed by a working group, and not the only discussion on the topic of potential laws governing balance billing.

So what’s a healthcare provider to do?

Be aware of the regulations applicable in your state, and be prepared to comply. As media focus continues on this topic, more legislators are taking up the issue. Stay tuned to your state’s law-making process to eliminate surprises for your cash flow.

Apply your organization’s payment policies consistently.

Communicate clearly with patients, whenever possible, about the charges they should expect and their options for payment. In non-emergency settings, check patient eligibility, and provide a pre-service estimate based on their health plan coverage.